YouTube Pushes Memberships, Merchandise as Alternatives to Ads

The YouTube app logo is seen on a smartphone in this picture illustration taken September 15, 2017. REUTERS/Dado Ruvic/Illustration

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By Paresh DaveSAN FRANCISCO (Reuters)

YouTube said on Thursday that video uploaders with more than 100,000 followers could start paid fan clubs on the service, one of several new features aimed at helping itself and its users diversify revenue after a turbulent year

The unit of Alphabet Inc’s Google said it was investing in reducing reliance on advertisers, who deliver billions of dollars in revenue annually but increasingly do not want to be associated with some content, such as racy music videos and roguish stunts.

Some video makers saw earnings fall last year when YouTube placated advertisers by restricting where commercials appear. New tools such as memberships and expanded merchandise sales should give video producers more control over their businesses, said Rohit Dhawan, senior director of product management at YouTube.

Dhawan declined to quantify the investment into what YouTube calls “alternative monetization.” But he said that YouTube is keeping $1.50 each month out of every $5 membership to justify resources involved.

Alternative monetization is a major topic for YouTube staff as they interact with video creators this week at VidCon, an industry convention in Anaheim, Calif. Facebook also expanded revenue options for videomakers this week.

YouTube’s goal is to develop a suite of software for creators to manage fan relationships and envisioned tools, such as a way to send personalized “happy birthday” videos to members, requires large teams, Dhawan said.

“The number of engineers we have working on this is not because we think there’s something there,” he said. “We know there’s something here”

Amy Shira Teitel, who posts science videos on YouTube, said she has gained 103 subscribers since starting to test memberships in September.

The extra $300 a month has let her expand research, including visiting archives in Washington, D.C. In exchange, she holds members-only conversations online about her forthcoming book.

Viewers “know I’m spread pretty thin, and they know if they help me make my work possible, it won’t go away,” Teitel said.

Videomakers choose the name of their membership club and the perks offered, all subject to approval by YouTube staff. Members can report creators that fail to deliver on benefits, such as T-shirts or shout-outs.

YouTube also said creators can customize merchandise on design service Teespring and sell it in a new section underneath their videos. Teespring is lowering fees as part of the deal, to provide creators an extra $1 in profit per item through 2019 and to pay YouTube a small commission, Dhawan said.